It’s been a long, hot summer across most of the United States, and that usually means good things for amusement parks and concert venues. As of the end of June, attendance at Six Flags (NYSE:SIX) parks — and the spending that goes along with it — was way up. So, too, were concert attendance figures for Live Nation Entertainment (NYSE:LYV), the world’s largest concert promoter. But despite the good news at both companies, neither stock is worth owning. Here’s why:

Bankruptcy

Six Flags, the owner of 19 amusement parks in North America, entered bankruptcy protection in June 2009 and reemerged less than one year later on May 3, 2010. It went from $2.7 billion in debt down to $1 billion with $725 million in new equity and annual interest expense of just $75 million. The company’s balance sheet went from choking on debt to one that is reasonably conservative.

As a result, when its stock resumed trading June 21, 2010, it took off like one of its rides and it hasn’t looked back. Up 49.2% to the end of 2010, so far in 2011, it’s up another 20.7% in spite of all the volatility in the markets. It seems it can do no wrong. Revenues for the first six months of the year are up 6% to $400 million, and adjusted EBITDA is up a whopping 86% to $65 million. So why, if everything is going so smoothly, am I not recommending its stock?

For me, it all boils down to price. Since its emergence from bankruptcy, its stock has gained 80.1% compared to 5.3% for the S&P 500. That’s a great deal of appreciation for a company slightly more than one year removed from Chapter 11. In the past decade, its best year was 2008 when in the first six months of the year it lost $35.9 million from continuing operations. Three years later in 2011, it lost $99.1 million from slightly less revenue. So despite having $1.7 billion less debt, it’s not doing any better financially, and it definitely doesn’t justify a forward P/E of 52.

Rising Attendance

Taken at face value, Live Nation’s second quarter was a resounding success. Concert attendance grew by 13% to 9 million people. Instead of a $33 million loss, it produced a $13 million net profit on $1.6 billion in revenue, which exceeded analyst expectations, up 23% year-over-year. At the end of the day, it sold a total of 17.7 million concert tickets in the quarter. That’s the good part.

The bad part is it’s a chronic money loser. On a cumulative basis, it has operating losses in the past decade of $486 million from $34.8 billion in revenue. Yet its stock gained 48% in 2009 and 34% in 2010. Perhaps I’m looking at the wrong financial statements because I have no idea what investors see in the company. Yes, it’s sexy, but sexy doesn’t pay the bills. Live Nation hit a five-year high in February 2007 when it traded at $25.63. In fiscal 2006, its operating profit was $30 million on $3.7 billion in revenue. This means investors were willing to pay almost $26 per share for a business that lost 48 cents that year. Its current book value per share is $8.11, which acts as a bit of a floor for the share price.

Let’s assume for a second that a private equity firm took a run at Live Nation. Its current enterprise value is less than seven times EBITDA. Add a 25% premium, and we’re talking $3 billion or $16.50 a share. They’d have to come up with almost a billion dollars in equity and the rest in debt. The interest alone would be more than Live Nation’s operating profit in any of the past 10 years. To me, that seems like rolling a very large ball up a very steep hill. Chances are good the PE firm would be crushed. At the end of the day, I just don’t see the attraction for a potential buyer.

Bottom Line

Enjoy Six Flags’ amusement parks and Live Nations’ concert venues. Avoid their stocks.